U.S. Senate passes bill to help with BLM oil and gas permitting process

CARLSBAD — The U.S. Senate passed a bill this week that would make a Bureau of Land Management pilot program, which was created to streamline the oil and gas permitting process, into a permanent fixture.

The BLM leases federally-owned land to energy companies in Southeastern and Northwestern New Mexico to drill for oil and natural gas.

Since 2009, Eddy and Lea counties have seen a dramatic spike in oil and gas operations, causing a backlog in applications to drill, also known as APDs.

The BLM Permit Processing Improvement Act of 2014, sponsored by Sens. Tom Udall, D-N.M., and John Barrasso, R-WY, unanimously passed the Senate on Tuesday. Sen. Martin Heinrich, D-N.M., was one 12 cosponsors of the bill.

The legislation is designed to extend a pilot program originally created by the Energy Policy Act of 2005. The act was designed to help the agency deal with APD backlogs while also balancing its other industry regulation duties.

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“This is a great step forward for our BLM offices in Carlsbad and Farmington to ensure they will have the necessary resources to balance the complex demands of oil and gas permitting and environmental management,” Udall said in a news release. “I am hopeful the House will act quickly to give the BLM and the industry the certainty they need to produce for New Mexico.”

The pilot program established the Permit Processing Improvement Fund which the Secretary of Interior can use to allocate a portion of the royalty fees paid by oil and gas producers to different BLM offices.

The fund collects approximately $18 million each year which can be distributed to the seven BLM offices incorporated into the pilot project, including the BLM’s Carlsbad and Farmington locations.

The Senate bill improves upon the program by providing the secretary with the flexibility to designate new project offices in response to shifts in industry demand while directing the BLM to consider public industry reports to reallocate resources more proactively, Udall said.

The bill would also establish a new APD fee rate of $9,500 per application, which would take effect in 2016. The rate would be locked through 2026.

The BLM Permit Processing Improvement Act of 2014 has been endorsed by the Independent Petroleum Association of America, American Petroleum Institute, Western Energy Alliance, Western Governor’s Association and the U.S. Oil and Gas Association.

Many oil and gas companies have expressed their support as well, including Concho Resources.